SC liquor ban: Forget ease of doing biz, states should work out ways to at least guarantee certainty

The Supreme Court order on ban of sale of liquor within 500 metres of highways is not a prohibition order, say restaurant startups, which are looking at the state government to help their cause even as they gear up to obey the order. One of the ways, say many, is to measure 500 meters away from highways as stipulated by the SC and then continue operations.

“A restaurant does not sell liquor at its gate. It is at a coffee shop or bar inside the restaurant. So we are looking to the state government for support without going against the SC order,” says Rahul Singh, founder and CEO, Beer Cafe, a beer chain.

Singh, a former CEO of Indian operation of golf brand, Greg Norman, before turning entrepreneur with Beer Café says that despite the government’s ease of doing business initiatives, the current highway liquor ban will put the business in jeopardy. “What messages are we are giving out in the era of liberalisation and the many, many government programmes for promoting entrepreneurship? That there is no certainty of business to your own people? Forget inviting MNCs and international collaborations, the country’s policies and the change in rules wipes out livelihood of people who have borrowed money to start business after complying with the laws of the land.”

The states’ biggest revenue is liquor and what is called for in these ‘trying’ circumstances, is to sensitise people and state authorities. “This is not a prohibition order and I wish the states would go with that objective and honor the SC order and not harass hoteliers and restaurateurs,” said a businessman who requested anonymity.

Representational image/ AFP

The highway liquor ban is a Supreme Court order but it sends a bad signal to the international community that wants to invest in Indian startups, says Riyaaz Amlani, CEO and MD, Impressario Entertainment and Hospitality Pvt Ltd, who operates a chain of 48 fine dining restaurants across the country. Impressario Entertainment, a Mumbai-headquartered firm has received two rounds of funding -- Mirah Hospitality and Food Solution Pvt Ltd invested Rs 48 crore while Beacon India increased its invested to Rs 8 crore. Amlani was looking for a third round of funding which he feels has been skittled by the highway liquor ban order. "The investor community is unsettled by such retrospective order. After licences are given and we invest thousands of crores in the sector, there is no guarantee that the business can continue. The government should create measures that will help restaurants and hotels stay in business," he says.

The buffer to prevent motorists from drinking and driving can be achieved without causing collateral damage to hotels and restaurants. “Hotels and restaurants are set up on the highways after getting licences and other infrastructure compliances,” says Singh. The way out would be to minimise collateral damage while working with stakeholders like the state, the citizens and the central government, he says.

The hospitality industry is the largest revenue earner and employer and a ruling like this puts the sector in jeopardy. What is ironic is that we don’t have a ministry we can go to to air our grievances, says Pradeep Shetty, honorary secretary of the Hotel and Restaurant Association of Western India (HRAWI).

“The Hotels and restaurants sector employs more people than the Information and Technology sector, the Railways and Bollywood. We are not clear which ministry we come under. We think we come under tourism, and also since we meet food safety standards, would come under the Food Safety and Standards Authority of India (FSSAI), under the Ministry of Health & Family Welfare,” rues Shetty.

The government should factor that the industry contributes revenues and also helps in people ‘smiling’ after the service provided in the hotels and restaurants, says Singh.

PM Modi launched the ambitious Skill India programme in 2015 with an aim to train over 40 crore people by 2022. Shetty says with the ban on liquor on highways impacting restaurants and hotels on the highway, the government stands to lose skilled people who have been trained by the industry. “We employ people from bartenders to managers to housekeeping staff and gardeners as well. Are their skills to go waste because we cannot sell liquor on hotels located 500 meters on the highway? Can’t the SC order be complied with without putting our business in jeopardy?” asks Shetty.

Tourism is already affected by the liquor ban in Kerala, points out Hari Nair, founder and CEO, HolidayIQ – a travel content website. Unlike Kerala, Tamil Nadu, Gujarat and Chhattisgarh are new states that are into tourism and hence the impact of the liquor ban in these two states will be not much compared to traditional tourist states, he says. “Gujarat started promoting tourism post prohibition. There has been an estimated 20 percent drop in tourism and 15 percent drop in hotel bookings in Kerala post the state’s liquor policy which prohibits the sale and service of alcohol in all public places, save bars and restaurants in five-star hotels," says Nair.

Nair suggests that the government should make a distinction between hard liquor and lighter wine and beer. “Tourism is also part of the government agenda. The states should look at making this distinction between hard liquor and beer and wine as that is what a tourist – be it local or international, looks for on a holiday.”